Examination of Witnesses (Questions 300-311)
MR WARRICK MALCOLM, MR ANDY LEATHER, MR JOHN COLES AND MR HANS PUNG
11 MARCH 2008
Q300 Ms Clark: I was going to ask what MoD projects are planned between now and 2020, but I think earlier on you said that you would provide us with something in writing in relation to that, so we will look forward to that. Following on from that, does the current forward programme for the MoD projects that there are take into account the industrial base and supplier base as well as service needs, in your opinion?
Mr Pung: I would say that it does take those things into account. They should be taken into account because of the defence industrial strategy. Certainly in the naval sector one of the things that the DIS does it says that there are a number of key industrial capabilities that the UK will look to maintain as it takes its programme forward. What the defence industrial strategy does not do is specify where that work will take place outside, that it will happen within the UK. It does not specify specific programmes, numbers of hulls in terms of the Navy, so it does not give the specifics, but it lays out the strategy of the framework for how that should happen. What happens in the second iteration of the defence industrial strategy I do not know because I have not seen it.
Q301 Mr Davidson: Can I just pick up the question of the MARS programme and the advertising of the oilers in the European Journal; do you have any observations on that?
Mr Malcolm: Just to reiterate that I think BAE Systems Surface Fleet Solutions have already said that to their knowledge that is certainly the case, although a peak load for CBF may not be able to handle any further work. Obviously they are looking for flexibility in terms of the schedules for work for post-CBF and that certainly concurs with what they have said to us in the feedback from the sector.
Q302 Mr Davidson: Is it your view that having gone to the stage of advertising and placing it in the European Journal it cannot then be clawed back if there are gaps?
Mr Malcolm: I am not a European law specialist; I could not comment.
Mr Davidson: Does SBAC have no view in that area? Right. Thank you, Chairman.
Q303 Chairman: You are aware of this joint venture between VT and BAE Systems and continuing talk of consolidation. Is there a future for naval shipbuilding in Scotland?
Mr Coles: With the current programme, absolutely. It goes on until 2015, 2016, whatever it is, and that is a long term in anybody's business. Thereafter, it depends on the future, shape and size of the Navy and of course maintaining the skill sets to support that thereafter. So the answer, I think, in the round is yes because those skill sets at the moment are largely in Scotland, for complex warships.
Mr Pung: I would add to that that it is not only the industry on the Clyde side of Scotland but the aircraft carrier, as you know, is being assembled in Rosyth and so not only does the forward programme support the industry on the west side of the country but also on the east side of the country, and it is an assembly and integration and the integration is an important part of that activity. It is happening in Rosyth for quite some time.
Q304 Chairman: We took evidence from the trade union representatives from Scotland and we were told that they are going to lobby the Scottish Government that they should invest more in skills, training and apprenticeships. Do you agree with their view?
Mr Coles: I do, yes. You need to make sure that you do not recruit such a large number of people that you cannot employ them afterwards; so you need to get the balance right, as Hans talked about, of the age sector and the profile sufficient to maintain that capability through the out years, yes.
Q305 Mr Davidson: Can I ask you whether or not that would apply across the whole of the defence aerospace, everything that you are covering? Coming back to point 5.2 in your submission, I am not clear from what you have said whether or not you think that enough is being done at the moment to tackle all of those issues sufficiently quickly.
Mr Malcolm: I think you can say no across the entire sector; any company that you speak to will say that they are struggling to fill certain vacancies, and that there are skills gaps and skills shortages in design engineers and so on, and they are concerned that people who are coming out of the universities do not have the skills that they require. So I think some of the initiatives that Andy mentioned, which certainly we are trying to bring companies closer to the colleges and to the further education forums and the universities to try and solve some of these issues, there are certainly good opportunities for companies to be more involved.
Q306 Mr Davidson: Will these issues be addressed by the time that the bonanza of the aircraft carrier order is actually there? Is the lead time too long or what?
Mr Malcolm: I think if you speak to the companies, specifically involving the CBF, they say that at the moment there are no skills issues that will prevent progress in the CBF. For the sector as a whole there are skills issues, with, for example, universities themselves recognising that they have strengths individually, which would be much more convincing if they came together. They are doing a thing called Engineering Research Pooling, so they are pooling together the research initiatives and all the work that they are doing with research and technology to make a more convincing case that will stand up on a world stage. They are now looking to SBAC and the companies themselves to get involved, to ensure that the research and development that is going on in universities is useful for the companies and that the skills that are being created there work for the companies. So, again, just in the past few years we have seen initiatives like this come together that allow the sector collectively to be much more involved and solve some of these issues and be more proactive, instead of sitting back.
Q307 Mr Davidson: Are there any particular initiatives that you wish to be taken that you have costed that are not presently being taken? The points that you make in 5.2 are well made but they are a bit vague—"Many school leavers and students do not meet the sector's requirements." How many? What do they not meet on? Is this being addressed and, if not, how much would it cost to address it, is the sort of thing that we would be interested in fleshing out because we want to say something about what ought to be done. Have you done that work?
Mr Malcolm: That is the next stage, if you like, the strategy that we have just published in the past two weeks, where we have laid out these key issues, and now we are very keen to make sure that we have something to take that on. That is when we will be sitting down with the unions, with the education colleges and together developing, if you like, an action plan that takes our strategy, which raises those issues and turns it into actions that we can take forward.
Q308 Mr Davidson: When we met the unions they were pretty clear in their submissions to us that they thought, as I understood it, that Scotland had been ahead of England some time ago but that was no longer the case, that particularly the modern apprenticeships being pushed forward were the way to go. Do you have confidence that these issues are being addressed in Scotland with the same urgency?
Mr Malcolm: I think they are being addressed. I think anybody that works in the business side in Scotland recognises that skills come up at every single meeting you go to. I think what we have seen in the past historically is that the actual organisational landscape, if you like, around skills development and skills programme delivery is an extremely confusing and cluttered one and that, I think, to some extent is impeding progress being as quickly as we would like. I think the recent announcement moving skills into a single skills agency and taking it away from Scottish Enterprise we would hope offers an opportunity for moving quicker and faster and further and bringing businesses on board at an earlier stage.
Q309 Mr Davidson: So it would be fair for us to go away and say that you are happy? You are happy as you can be?
Mr Malcolm: We are happy that the signs are that things will improve.
Q310 Mr Davidson: As happy as you can be in the circumstances because if you are not happy I do not want representatives from the SBAC telling us in two years what they are not happy about. This is your opportunity now to tell us what you are not happy about.
Mr Malcolm: As I say, I will leave with you a copy of our recent published strategy and that is the list of all the issues that we currently have and all the issues that we are currently going to address with the Scottish Government. So if there are any issues that are raised by a company with you personally then they have not raised them with us.
Q311 Chairman: Can I thank the witnesses for their attendance today. Before I declare the meeting closed did you wish to say anything in conclusion, perhaps on areas not covered during our questioning?
Mr Coles: Not from me, Chairman.
Mr Leather: Not from me, Chairman.
Chairman: Thank you very much once again for your attendance, and if you feel that something has been missed can you please put it to us in writing. Your evidence will be very important and a very crucial part of our Committee when we compile our report.
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